Here's the breakdown.
Psionic is weaker than other Possession traditions because they have major restrictions and no payoff. There's no shortage of other possession traditions.
Possession advantages:
Low force possession spirits are much stronger than low force materialization spirits, because you can use them to provide long-lasting buffs (possessing armor or a melee weapon for example), or have them possess the corpse of someone with high physical stats (thereby getting original stats + force, rather than force+spirit type mods). Things get REALLY crazy if you can do stuff like get some dead trolls, equip them with good armor and weapons, and have even modest-force Guardian spirits possess them.
With Channeling, you can combine the mage and the spirit into a Voltron-esque monstrosity who can cast spells and stack Immunity to Normal Weapons on top of armor.
Channeling replaces the mage's Magic stat with the spirits. Call up a high-force spirit to possess you, and you use its magic instead of yours while Channeling and casting your spells. You can get really crazy by doing stuff like getting yourself armored cyberlimbs, trauma dampers, and other defensive ware that costs you Essence and thus Magic, then summoning a spirit to possess you and replacing your magic with its magic. Bonus for using spirits of man, since you also use its spellcasting score if it is higher than yours. You also replace all your other skills with theirs if theirs are higher, so free Unarmed Combat = force, Perception = force, etc.
Materialization advantages:
Possession mages need Channeling for a lot of their best tricks, which is a metamagic, so they cannot start out with Real Ultimate Power. Granted, it's not too far off.
Being possessed is blatantly obvious to the naked eye. A Possession mage who is Channeling-dependant will either walk around glowing, or will have to have a spirit on standby - which means not being up and running immediately. A Materialization mage can have a spirit on standby ready to act independantly, while being up and running at full power all the time.
A Channeler is better than a Materialization mage or a Materialization spirit, but not necessarily better than a Materialization mage AND a Materialization spirit acting independently. Channelers get the biggest benefit on the defense end, not the offense end, but SR favors offense over defense and having a spirit and a mage separate and dangerous means taking down 2 people per IP instead of 1, and having 2 people to shoot at instead of 1.
Very high force Materialization spirits are stronger than high force Possession spirits, because the Possession spirits start hitting Augmented Maximum problems with the people they possess. A force 9 air Possession spirit is at best going to have 10 agility in a body (if they grab an elf), but a force 9 air Materialization spirit can outdo that. Homonculi can solve this but are a nuisance - you have to walk around with an animated statue or something which is subtle like no, and also they cost money. This is more of a long-term thing.
A lot of GMs hate Possession with a burning passion, and will screw with you for being a Possession mage. I suggest asking your GM what they think of Possession traditions before making this decision, and if they start foaming at the mouth, don't play it.
If you do play Possession, the spirit types you really want are Guardian and Man. Guardians are the best for possessing dead bodies (because you can whistle one up that can use weapons), Man are the best for possessing you (because of the magic/spellcasting replacement).
